Business rates are a tax that companies have to pay on most non-domestic properties. However, there are ways to avoid paying these rates on empty properties. In this article, we will discuss some strategies that business owners can use to reduce or eliminate their business rates on vacant properties.
One of the most common ways to avoid paying business rates on an empty property is to claim an exemption. In most cases, if a property is empty for more than three months, the owner can apply for an exemption from paying business rates. This exemption can last for up to six months for industrial properties and three months for other types of properties.
To qualify for this exemption, the property must be completely empty and not used for any business purposes. This means that no one can be working or storing goods in the property during the time it is empty. It is important to note that the exemption only applies if the property is genuinely empty, and any attempt to use the property for business purposes could result in the exemption being revoked.
Another way to avoid paying business rates on empty property is to apply for a relief scheme. Some local councils offer relief schemes for vacant properties, which can significantly reduce the amount of business rates that need to be paid. These relief schemes vary from council to council, so it is important to check with the local authority to see if any schemes are available.
One common relief scheme is the Small Business Rate Relief, which provides discounts on business rates for properties with a rateable value below a certain threshold. This relief scheme can be applied to empty properties as long as they meet the eligibility criteria. Another option is the Empty Property Relief scheme, which provides a 100% discount on business rates for properties that have been empty for more than three months.
It is important to note that applying for relief schemes can be a complex process, and it may be helpful to seek advice from a professional such as a surveyor or accountant. They can help navigate the application process and ensure that all necessary criteria are met to qualify for the relief schemes.
In some cases, businesses may be able to avoid paying business rates on empty properties by temporarily using the property for charitable purposes. Properties that are used for charitable purposes are exempt from paying business rates, so if a business allows a charity to use their empty property for a period of time, they may be able to avoid paying the rates for that duration.
It is important to note that this strategy should be used legitimately and in accordance with the rules and regulations set forth by the local authority. Attempting to exploit this loophole could result in fines or penalties, so it is essential to ensure that all charitable activities are carried out in good faith and within the confines of the law.
Finally, one option for avoiding business rates on empty property is to consider selling or leasing the property. By selling the property, the business owner can rid themselves of the responsibility for paying business rates altogether. Alternatively, leasing the property to a tenant can transfer the liability for business rates to the tenant, thereby relieving the owner of this financial burden.
It is important to carefully consider the implications of selling or leasing the property, as these options may have other financial or legal repercussions. It is advisable to seek advice from a legal or financial professional before making any decisions regarding the future of the empty property.
In conclusion, there are several strategies that business owners can employ to avoid paying business rates on empty properties. From claiming exemptions and applying for relief schemes to allowing charitable use or considering selling or leasing the property, there are options available to alleviate the financial burden of business rates on vacant properties. By exploring these strategies and seeking professional advice when needed, businesses can navigate the complexities of business rates and find ways to minimize their financial obligations.